Green hydrogen and energy transition in Latin America | Atalayar

As countries and energy companies around the world seek to accelerate their transition to cleaner energy resources, Latin American countries are drawing up plans to scale up the production, consumption and export of so-called green hydrogenwhich is generated from clean energy resources.

One of the most recent and high-profile developments occurred in June, when Argentina’s Tierra del Fuego province – located at the southern tip of South America – described plans to develop a hydrogen and ammonium industry.

The province is trying to tap into the region’s vast wind resources attract $6 billion in technology investment to produce the fuel. This includes investing in wind farms to generate electricity that can be used to power electrolysers, which remove oxygen atoms from water to produce hydrogen.

Once established, some of the hydrogen from the project will be used to make ammonium, which in addition to being used to create fertilizers, can also serve as a carrier fuel for transporting hydrogen through pipelines to downstream markets.

REUTERS/HENRY ROMERO – PDVSA Island Oil Refinery in Willemstad on the island of Curaçao

In addition to renewable sources such as solar and wind energy, hydrogen is considered a potential low-carbon or zero-carbon fuel this is the key to transitioning away from fossil fuels.

As countries in Latin America and the Caribbean focus on green hydrogen, hydrocarbon-producing countries such as Argentina, Colombia and Trinidad and Tobago can use carbon capture, utilization and storage technologies to remove carbon emissions from their production process and generate what is known as blue hydrogen.

Tierra del Fuego’s announcement comes as the appetite for hydrogen – and its economic and environmental benefits – continues to grow.

While there was only three hydrogen pilot projects in Latin America in 2019 – in Argentina, Chile and Costa Rica – in 2021, the region had a portfolio of more than 25 projects, according to the International Energy Agency, many of which were GW-scale megaprojects that intended to export hydrogen to Europe and Asia.

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AFP/PHILIP FONG – Hydrogen supply and storage facilities at Fukushima Hydrogen Energy Research Field in Namie City, Fukushima Prefecture

Economic benefits

Hydrogen has significant potential as a clean energy substitute for fossil fuels in electricity generationespecially in the energy-intensive industrial sector, but also as a transport fuel in many sectors.

Argentina and Brazil have the most extensive hydrogen plans on the continent and are also considering become major export hubs to supply European marketsthe center of global hydrogen demand, and Asia.

As the world’s second largest producer of hydroelectric power and home to significant wind and solar resources, Brazil has significant potential to produce hydrogen. Some estimates suggest the country could earn between 4 and 6 billion dollars by 2040 thanks to the export of hydrogen only to EU and USA.

In the northeast of the country, the $5.4 billion Base One green hydrogen project will be the largest in the world when completedcapable of producing 600,000 tons per year from 3.4 GW of combined solar and wind power generation capacity.

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AFP/EZEQUIEL BECERRA – A man refuels his car with hydrogen at an Ad Astra Rocket station in Guanacaste, Costa Rica

Beyond energy, hydrogen has important applications for the food sectoramong others, highlighting the positive effects that hydrogen development can have in addressing global challenges.

“Hydrogen has multiple applications, not only for the energy sector but also in the manufacture of fertilizers, which is an increasingly critical concern for countries around the world,Rodrigo Rodriguez Tornquist, secretary of climate change, sustainability and innovation at the Argentine Ministry of Environment and Sustainable Development, told OBG.

“Overall, three major crises are under discussion: the energy, food and environmental crises. Hydrogen is a key element in all three, as it generates a more sustainable energy solution, enables food production and accelerates the decarbonization of the economy.”

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REUTERS/CARLOS GARCIA RAWLINS – Oil well operated by the Venezuelan state oil company PDVSA, in the Orinoco belt

Reach export markets

To achieve their hydrogen ambitions, Latin American countries need to address the most difficult and costly part of the energy industry: transportation.

This will likely involve both internal pipelines for intracontinental markets and maritime export terminals to reach Europe and Asia.

One of the most attractive aspects of hydrogen is that hydrocarbon pipelines can be repurposed to transport it. Latin America and the Caribbean already has strong pipeline networks to the north, from Venezuela and T&T, and to the south, from Bolivia, which supply Argentina and Brazil and could serve these ambitions of export.

In the case of Tierra del Fuego, the province’s location at the tip of South America means it is also eyeing potential exports to Asia.

In addition to supplying export markets, hydrogen production could also result in the use of and environmentally friendly fuels at the national level.

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AFP/PHILIP FONG – Staff from Apollo Group, a small energy provider that has been beefing up its renewable energy offerings in recent years, prepare to refuel a hydrogen car at the company’s hydrogen filling station in the city of Fukushima

“Latin America not only has the potential to supply high-demand international markets like Europe, which has been more aggressive in its adoption of clean energy, but also to displace imported fuels,” Alfonso Blanco, executive director of the Latin American Energy Organization, told OBG. “The great natural advantages of countries like Argentina and Chile to produce renewable energy allow the low-cost and large-scale production of green hydrogen.”

Development schedules

The adoption of hydrogen in the global energy system will last for decades, with most megaprojects in Latin America are considering 2030 as their target completion date. This timeline gives governments more time to establish the regulatory, institutional, legal and market frameworks that will allow hydrogen to enter the global energy system in a meaningful way.

For example, one of the biggest projects in Latin America is the $8.4 billion Pampas facility in Argentina’s Río Negro provincewhich aims to generate 15 GW of electricity that will produce 2.2 million tonnes of green hydrogen by 2030.

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AFP/MICHAEL WACHUCIK – File photo. Hydrogen double decker bus in Ellon in Aberdeenshire, Scotland

In the same way, Uruguay has developed a hydrogen roadmap that aims to build 10 GW of renewable energy to power electrolysers as part of its plan to become a net exporter in the 2030s.

Ultimately, the key to developing these low-carbon, capital-intensive hydrogen projects will be cooperation between government and business, which industry figures show must continue to include incentives for renewable energy.

“Globally, hydrogen will enable the decarbonisation of many sectors – in terms not only of electricity production, but also of energy consumption, particularly in the industrial and transport sectors”, Rodriguez Tornquist told OBG. “However, this transition requires a long-term roadmap and significant resources, which will require all public and private sector actors to align their needs and expectations.

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